National Bank of Hungary lowers base rate to 6.00% and hints at deeper cuts, targeting 4.50% as inflation projections fall.
The National Bank of Hungary reduced its base rate by 25 basis points to 6.00%, matching market expectations. The move follows a dovish shift in forward guidance, with officials citing lower inflation projections and a resilient forint as catalysts for faster easing.
Prior to the decision, consensus had aligned with a 25bps cut, though the central bank’s communication suggested a more aggressive path ahead. Governor Varga indicated two additional cuts over the summer, resuming a cycle previously delayed by geopolitical tensions.
Analysts now anticipate the policy rate could reach 4.50% by year-end, revising earlier forecasts of 5.75% for end-2026. The central bank’s statement emphasized flexibility in responding to disinflation trends.